China Happenings This Week

December 7, 2021

Why Online and Offline is a Must to Meet Chinese Consumers’ Retail Expectations

There is no opposition between Onlive VS Offline: most Chinese consumers do not make ‘either-or’ shopping decisions. They may shop online or go to the store, depending on their current needs. They do, however, desire a consistent and integrated experience regardless of where they are. More physical establishments are enhancing customer experiences with tech-driven services such as live streaming, as well as physical forms such as workshops and event spaces that are also connected to technology.

Retailers are successful if they 1. make it more entertaining, 2. make it more pleasurable, 3. make it more reliable, or 4. take away the agony.” It used to be enough to be the best in one of the four quadrants. However, as the retail industry has gotten more competitive, retailers must now cover all four quadrants. Alibaba, for example, not only addresses the problems (like Amazon does), but it also adds a lot to make purchasing enjoyable.

Consumers now regard shopping as a pastime or a form of entertainment, with the goal of not just getting goods but also being entertained and learning new things. And making some purchases along the way.” Consumers, on the other hand, have high expectations for the entire customer journey. They are looking for something more than just a transaction. Consumers expect experiences that are enjoyable, meaningful, and connected to their values. It doesn’t have to be a high-tech augmented reality game all of the time.

Link: https://www.chinaskinny.com/blog/chinese-retail-expectations/

 

Why China’s Idol Economy is at its Turning Point

With a few significant scandals and strengthened controls and actions by the Chinese Cyberspace Administration, 2021 was a year full of changes for Chinese influencers and KOLs. Following the “227 Event,” which involved actor and singer Xiao Zhan and his adoring followers and resulted in the entire suspension of a website in China due to its widespread reporting, a barrage of criticism erupted.

Furthermore, many followers will go to any length to support their idol. To stimulate irrational consumption, brands exploited this mentality by linking their products to their idols’ “reputation.”

The “Qinglang Campaign” is a broad crackdown in China against “fan culture.” To begin with, Chinese authorities have stated unequivocally that they “do not support” unreasonable fan behaviour. Because of this stern stance, brands were forced to reconsider their cooperation with Chinese idols. The old idol economy model, which is based on the purchasing power of fans, would plainly put companies in danger. 

Finally, numerous fan organisations have been subjected to direct limitations on Chinese social media platforms. On Weibo, certain well-known musicians’ online fan groups were banned for a month. As a result, nearly all fan groups are now attempting to find ways to avoid the storm. They’re altering their social media accounts usernames and advising their fans to keep a low profile.

The current state of the idol economy does not imply that idols will vanish in China; fans still adore their idols, but extreme forms of fandom have been prohibited. When possible, fans can still find fresh ways to show their support for their favourites.

Link: https://daxueconsulting.com/china-idol-economy/

 

5 Emerging Cities in China Luxury Brands Cannot Overlook

When it comes to marketing, global luxury companies concentrate on first-tier cities, yet brand strategies in emerging markets must be distinct from those in Tier-1 cities. Young shoppers in lower-tier cities are less concerned about living costs and saving challenges than those in top-tier cities. As a result, they have more money to spend.

The 11/11 Shopping Festival confirmed that China’s lower-tier cities are a promising market for luxury products. Between November 1 and 3, when Tmall began selling luxury items, the number of luxury customers in smaller cities increased by about 50%. Tmall’s Luxury Pavilion received orders from YOY and shoppers from nearly 400 different cities.

In emerging nations, the “invisible rich person” has become a critical consumer category. 5 non-top-tier cities with a high concentration of high-net-worth individuals: Ningbo, Suzhou, Xi’an, Shenyang, and Wuhan are all cities in China.

Link: https://jingdaily.com/lower-tier-cities-high-net-worth-luxury-ningbo-wuhan/

 

Baidu App launched the first metahuman based on celebrity 

GONG Jun, the first star in the metaverse with a metahuman IP, has joined the Baidu app as an AI explorer. This metahuman is distinct from other virtual idols in that he can interact with app users. You can talk to him and ask him questions, and he will appear when you call his name and answer your inquiries.

Baidu used Text To Speech to make the metahuman’s speech sound as real as possible. Users can allow him to read the news during his commute. A metahuman IP might give celebrities more options and set them apart from the competition. It can also be used in a variety of situations, such as customer service, tutoring, and so on.

Link: https://mp.weixin.qq.com/s/NZGaFUjT1PWRBsAA3m9ZwQ

 

WeChat external links regulation

In a private message, the users can send the external links they want.In the group chat, the users can share the eshop(Taobao, JD etc) links and open them directly (test stage). It plans to let the users manage the external links in their WeChat.

Link: https://mp.weixin.qq.com/s/7zxqex8DuuWj8cFfDhz2bw

 

Why do luxury brands like marketing crossover?

  • Ferrari held its first fashion show by inviting Armani’s creative director to design clothes. 
  • LV opened its first coffee shop in Japan at the beginning of the year. The high-value design attracted many people. Although the price of LV coffee is higher than the market price of other coffee, the price is very cost-effective for the luxury brand image left by Lv to users.
  • Hermes opened a gym in Chengdu this year. Hermes has grasped the concept of an active and healthy life of people, sending the positive life spirit of the brand in addition to fitness.
  • Prada opened a vegetable store in the centre of Shanghai and covered the whole vegetable market with logos. The highlight is to provide Prada packaging bags for offline consumers.

The purpose of luxury play cross-border marketing is to pursue freshness and use “small money to get large traffic flow”. In addition to taking care of their own consumer groups, brand culture can be extended to life.

Cross border marketing not only retains the luxury temperament of the brand but also provides users with different luxury product experiences. Compared with sports cars, clothing can also expand the range of consumers. It injects interest into the brand and allows users to understand the value point and culture of the brand in an all-round way

In fact, every cross-border brand has insight into the current popular life and combines the tonality of the brand with marketing to form a higher degree of discussion, but also seize more consumer groups.

Link:https://mp.weixin.qq.com/s/vqBhla4FeAkX62gwVMg09g

 

You may also like

Weekly China Oversight

November 30, 2021

WeChat’s latest update signals support to China’s first personal information legislation

Tencent’s WeChat received a fresh update for its 8.0.16 version recently. Users can now discover a new page in the settings menu called “Personal Information and Authorizations” by going to Settings -> Privacy.

This modification is in reaction to the publication of China’s first Personal Information Protection Law, which requires businesses to process personal data publicly and accurately. 

WeChat’s latest update gives users four alternatives for swiftly viewing and changing the personal information they’ve submitted to the app and other third-party platforms:

  • System Permissions
  • Authorisations
  • Personalised Ads
  • View and Export My Information

Link: https://daoinsights.com/news/wechats-latest-update-signals-support-to-chinas-first-personal-information-legislation/

 

Should Brands Distance Themselves From ‘Controversial’ Celebrities?

Apart from extreme cases like Kris Wu should brands be quick to cut ties with their brand ambassadors?

“In the digital era, people who agree do not speak as loud as those that disagree, but those who disagree may not be the brand’s actual consumers”

As a result, companies can only get an accurate answer through surveys and research. Luxury firms are selecting many ambassadors for their ranges to limit risk, with Dior leading the way with 14 spokesmen and numerous house friends.

With increasing calls for diversity and inclusion in China, local customers are demanding a more diverse cast of brand ambassadors. The local market has shown signs of fatigue towards pretty ambassadors, now preferring more intriguing backstories and deeper connections with their brands.

Link: https://jingdaily.com/luxury-brands-distance-controversial-kols/

 

Five consumption trends in China in the next 10 years (by Mckinsey)

China’s emerging consumer class has become the growth engine of many global consumer goods: in the next decade, middle and high-class consumers may become the main force to promote China’s consumption growth. 

Non-first-tier cities may become a source of power: cities are expected to account for over 90% of China’s future consumption growth. Different urban consumer marketplaces have significant disparities. The rise of Chinese local brands is fueled by a shift in consumer attitudes: Chinese consumers’ brand preferences are shifting, and consumer support for local brands has aided the rise of some local businesses. Chinese brands are gaining market share in domestic consumer goods and electronic devices, with a market share of more than 50%.

More than 70% of Chinese digital customers consume both online and offline, resulting in large data pools. Consumption data is exploding thanks to the burgeoning digital economy. A new market consumption curve is emerging: the consumption curve in the Chinese market is shifting as a result of the confluence of variables such as business model innovation, technology-driven unit cost reduction, and new purchasing behaviour. Chinese technology companies are at the forefront of the global curve shift.

Link: https://mp.weixin.qq.com/s/XjHKuMtKKb7zEOb4rcY5Cw

You may also like

China Roundup This Week

November 16, 2021

What can Europe learn from China’s live e-commerce boom?

Consumers in the United Kingdom, Spain, France, and Poland expressed interest in live e-commerce for online shopping, with 70% expressing interest. In 2020, Western brands will see 15 times more engagement in live e-commerce than they did on traditional social media, three to five times more sales, and a 50% increase in customer numbers.

If China’s growth trajectory is followed, Europe has the potential to reach over 160 million live streaming e-commerce consumers by 2024, with about 100 million of them making purchases while viewing live feeds.

China is about five years ahead of Europe in terms of economic development. China’s experience may provide us with valuable lessons. It took China a few years to turn live e-commerce into a popular format used by both companies and consumers on a regular basis. Europe is currently in the research and development phase, but we can anticipate some significant changes in style and approach:

 

Link: https://technode.com/2021/11/04/what-can-europe-learn-from-china-livestreaming-ecommerce-boom/ 

 

Can C-Beauty Brands Cultivate Loyal Consumers?

Florasis, which ranked third on Tmall’s “Double 11” best-selling brands list in 2020, has dropped out of the top ten this year. Local beauty brands frequently spend more than 65% of their income on marketing, substantially exceeding the market norm of 30-40%. Although their massive advertising, KOLs, and live streaming budgets quickly generated social buzz and attracted new customers, they failed to maintain user loyalty.

“Through data analysis from ByteDance, we found out that most international companies work on the branding side, while Chinese brands focus more on the performance side,” Hwee Chung, Kantar Worldpanel’s head of the China beauty market, stated. That is, Western brands employ influencers to create a desirable atmosphere around their products in order to attract customers. Domestic brands, on the other hand, use low pricing and KOL promotions to entice customers to buy specific products. R&D and licencing are not addressed by C-beauty brands. Yatsen Group, for example, holds 38 licence patents, but Procter & Gamble files 3,800 licences each year.

Link: https://jingdaily.com/c-beauty-brands-loyal-chinese-consumers/

 

Changing Attitudes Towards 11/11 Shopping Festival?

Despite setting new sales records, Alibaba and other e-commerce companies are keeping their sales figures quiet this year.

Alibaba attempted to rebrand “Double Eleven” as the Chinese government pursued attempts to regulate big digital businesses and wipe out the worst excesses of economic inequality. The company’s annual promotional extravaganza lacked the star power of prior years, with green efforts, homegrown companies, and rural products taking centre stage.

Link: https://www.sixthtone.com/news/1008954/alibaba-tries-an-unfamiliar-new-singles-day-strategy-restraint

 

Douyin City

This is a big IP from Douyin. This offline event was held for three years by Douyin in collaboration with local tourism/brands. Every time they visit a city, they should promote both the place and the companies. They’ve visited over 70 cities, and this time they’re in Sanya. Its goal is to raise awareness of Douyin through various activities such as dreamland, a music festival, and a webcast. People will also learn about the city, where to go, and what distinctive foods they have, among other things. They built six blocks for Sanya’s Dreamland, where players can take on various identities, complete stages, and win prizes.

They used VR, AR broadcast, and the Douyin micro application to create interactive and social situations. People would be able to see brand information through virtual reality and augmented reality interactive experiences. Celebrities and musical KOLs were also asked to attend the festivals. This is a win-win idea for both Douyin and the cities; by uploading short videos with #Dou In the City, KOLs will encourage more people to come and visit. This effort will give the KOLs more exposure.

Link: https://mp.weixin.qq.com/s/Imd1eRm2LYkcR9auoLWXKA

 

Singles’ Day posts record haul despite slower pace, as China’s antitrust moves dampen world’s biggest online shopping event

The world’s biggest online shopping event recorded a slower pace of annual growth after Alibaba Group Holding swapped the usual razzamatazz of Singles’ Day for a more down-to-earth event that stressed sustainability.

The gross merchandise value (GMV) for this year’s Singles’ Day reached a new high of 540.3 billion yuan (US$84.5 billion) across the 11-day campaign, representing an increase of 8.45% year on year. Since Alibaba launched Singles’ Day in 2009, this is the first year of single-digit GMV growth.

  1. This year’s Singles’ Day was weighed down by China’s slowest economic expansion pace in decades, as growth slowed to 4.9 per cent in the third quarter
  2. This year, Tmall issued 100 million yuan worth of ‘green vouchers’ to encourage purchasing decisions that ‘contribute to an environmentally friendly lifestyle’

Link:https://www.scmp.com/tech/big-tech/article/3155762/sales-growth-alibabas-singles-day-drops-amid-chinas-crackdown-big

 

How to Recontextualize Brand Narratives in China

The house’s 70th-anniversary campaign, which featured Max Mara’s iconic Teddy, was a major hit in China, driving organic social traffic to offline footprints.

Image courtesy of Max Mara’s Mini Program.

  1. With a sophisticated understanding of China’s digital ecosystems, Max Mara has successfully built up a content-to-commerce loop.
  2. Luxury brands need to tailor social currency that can be showcased and shared with users’ friends via social platforms, per each campaign’s themes, as well as each platform’s user demographics and capabilities.
  3. Global HQs of luxury brands need to be aware of the uniqueness of China’s ecosystems and allow higher flexibility in experimenting with innovative approaches in the market.

Link:https://jingdaily.com/max-mara-70-anniversary-campaign-china/

You may also like

Unusual Brand Collaborations In China

November 15, 2021

Whether your business is selling lipsticks, chicken wings, or museum tours, the topic of how to reach more new people – more customers – comes up in every marketing meeting, across every sector imaginable. So here’s a suggestion for you all – Why not tap into the audience of someone else? 

A collaboration with a competitor is obviously not going to work, but what about one with a brand that sells something completely different? 

To get noticed among China’s millennial consumers, businesses must take advantage of unusual collaborations. It may sound bizarre, but it has the potential to attract a new audience that was previously unaware of your existence. 

Here are a few examples of unusual brand collaborations in China

 

Perfect Diary – Cosmetics
Disney – Kids entertainment
Collaboration – Limited-edition line of amino acid-based facial cleaning products inspired

 

The C-beauty brand routinely leverages brand collaborations as part of its overall goal to appeal to China’s millennial and Gen Z audiences. In a recent collaboration with Disney, the company released a limited-edition line of amino acid-based facial cleansing products inspired by the Baymax character from the 2014 animated film “Big Hero 6”. Two of the makeup remover bottles are sealed with a Baymax head, while other goods include images of the character on the packaging, appealing to young buyers’ love of cuteness and blind-box style toys.

 

KFC – Fast food restaurant chain
Karl Lagerfeld’s – German fashion designer and photographer
Collaboration – Limited Edition Chicken Bags 

 

KFC China recently resorted to the luxury business to mark the company’s 80th anniversary. Karl Lagerfeld, the fashion mogul, was the chosen brand, and he created two limited-edition bags. The centre Karl Lagerfeld logo was replaced with Kentucky Fried Chicken, and Paris was replaced with Kentucky in the funny new rendition of the original Karl Lagerfeld design. The bags contain three red stripes, which are KFC’s signature colours.

Ikea – Furniture retail company
ROG – Gaming retail
Collaboration – Gaming Furniture and Accessories


Ikea presented an eagerly anticipated collaboration with the Asus Republic of Gamers (ROG) on a new collection of affordable gaming furniture and accessories, taking a “China-first” approach to product innovation. A sleek high-backed gaming chair, an adjustable table that can be used as a standing workstation, and a wall-mounted pegboard to keep gaming equipment organised are all part of the black-and-red collection.


Conclusion

Younger consumers, particularly Generation Z, are perceived as having a larger proclivity for purchasing from ‘collaboration’ collections than older consumers. According to Boston Consulting Group (BCG), Chinese Generation Z customers have the largest desire for cross-brand collaborations among this generation’s quest for newness from the brands they like.

These out-of-the-box collaborations demonstrate that the opportunities for co-branding in China are limitless. Why limit yourself to usual collaborations when you can have so much fun? Collaboration with other well-known brands across all industries may help businesses grow their audiences, increase sales, and establish a reputation as a creative and fun brand among Chinese customers.

While unique collaborations have a lot of promise for your company, getting started can be challenging. If you require further support, please contact our team. We apply our expertise and experience to assist firms in forming meaningful partnerships and developing a digital marketing strategy that better targets and connects with Chinese customers. For additional information, please contact us by phone or email.

 

 

You may also like

WeChat Conference 2018 in a nutshell

February 5, 2018

The Tech mogul in China, Tencent holds a WeChat Developer Conference every year where they announce the latest additions, developments, new features to their platform. Last year, WeChat introduced mini-programs, a sub-application that allows the users to access thousands of apps within the WeChat platform.

 

This year, Tencent has not unveiled any new features, instead, they will be focusing more on mini-programs. They believe that mini-programs are the way forward for both users and businesses.

 

Here is what you can expect in 2018 from the most popular features on WeChat –

 

Mini-programs

 

Currently, there are around 580,000 mini-programs on WeChat. The company wishes to encourage more developers to create mini-programs on the platform. Since its introduction, international brands like KFC, Swaroski, Coach and Tesla were quick to embrace this app to reach its users in China.

 

WeChat has even introduced a mini-program called CityExperience that is essentially like a travel guide. Cities like Sydney, London and Dubai have already become a part of CityExperience and the company is hopeful of adding more locations to this mini-program.

 

App for WeChat official accounts

 

Previously, brands have struggled to open WeChat official accounts, especially if they didn’t have a corporate presence in China. But not anymore! Brands can now open official accounts without a corporate presence in China.

 

But the biggest problem is that the brands can update content on the official account only from a desktop rather than being updateable from the WeChat app. To address this problem, Tencent is working on an independent app that might keep the content updation mobile friendly. This app is said to be on the similar lines of the Facebook Pages Manager.

 

WeChat Tips makes a comeback

 

According to a report in Wall Street Journal, Apple and WeChat have reached an agreement over the Wechat Tips. WeChat Tips is a function that allows the users to compensate the content creators for their quality content. This function was disabled last year when the creators of Apple communicated that it fails to comply with the rules of the App Store.

 

Social gaming is in!

 

WeChat is also rapidly expanding into the mobile gaming territory. The platform has over 300 million active users. It has also partnered up with renowned video game developer Ubisoft – this will allow Ubisoft’s subsidiary company Ketchapp to launch WeChat games in 2018.

 

Tencent hopes to combine their gaming division with their massive social platform user network to increase their social gaming revenue.

You may also like